A clarion is a medieval trumpet that had clear, shrill tones. Trumpets were often uses to get people’s attention when making announcements. We are using “clarion” in the context of making announcements, as well as being thought-provoking when sharing our information and opinions with those who are interested in new investment ideas.
Topic: Market Outlook 2013
After a down-turn into mid-November, global stock markets are putting in a pretty good year-end rally, sparked by improving economics in both the USA and China, and by some stability in the Euro Zone with regards to Greece, Spain, and Italy.
Although off their 2012 highs, the major North American stock indexes are up for the year, with the U.S. exchanges more so than their Canadian counterparts.
Typically at this time of year, after suitable tax-loss selling, there is the traditional year-end and beginning-of-year rally. There is even a positive technical indicator suggesting there will be a continuation of the up-move that began in mid-November.
Dow Theory has it that the Industrials and the Transports must confirm each other for the market to sustain a worthy advance. Both of these U.S. Indexes broke out recently above: (1) their down-trend lines that started near the beginning of October; and (2) their 200-day Moving Average. Both Indexes continue to move higher.
Congressional resolution of the so-called “fiscal cliff” issue could be a key catalyst to higher stock prices.
Gold, meanwhile, is going the other way. The SPDR Gold Trust ETF (GLD) recently declined below its 100-day Moving Average and could go on to test both its 200-day and 300-day MAs. Breaking those on the downside would be extremely bearish for the gold bugs.
All in all, we expect that 2013 will be much more settled than 2012, and that slowly-improving global economics, tame inflation, and increasing liquidity will result in less market volatility, increased trading, and higher stock prices.
Bob Weir, CFA, and Director of Research
Stock-of-the-Week
Canadian Orebodies Inc. (CO: TSX-V)
Canadian Orebodies Inc. has interests in 11 mining exploration properties located in Canada. The Company’s exploration focus is on iron ore, and its main property is the Haig Inlet iron ore project, located on the Belcher Islands in Hudson Bay in southern Nunavut.
Being relatively unknown, the Haig Inlet project is a hidden gem in the Canadian iron ore sector, with more than 500 Mt @ 35% Fe in a NI 43-101 compliant mineral resource. The project’s location in the southern part of Hudson Bay is favourable compared to the more northerly locations of many of its more well-known domestic peers. The deposit is located at tidewater and will not need a costly railroad or a pipeline to get to port. Also, since the Belcher Islands are close to Quebec, the project may be able to capitalize on some of the infrastructure commissioned under Plan Nord.
In 2012, Canadian Orebodies increased its land position on the Belcher Islands by 57%, bringing its land position to 39,903 hectares. Also in 2012, the Company drilled a total of 6,469.6 metres in 38 holes on four separate properties. This program, and previous work done, will form the basis for a new NI 43-101 compliant resource estimate to be published in early 2013.
Although this should garner increasing investor attention in the Company, we consider the catalysts necessary to galvanize investor interest and kick-start the stock again are: (1) obtaining a Preliminary Economic Assessment for the Haig Inlet project; and (2) securing a strategic partner to develop and market the project.
We initiated coverage of Canadian Orebodies on May 16, 2012 with a Speculative Buy rating. The shares are suitable for risk-tolerant investors.
Our Target Price is $0.70. However, this will require the return of more favourable investor disposition towards iron ore stocks. We cannot speculate when this will be. Although iron ore prices have recovered from recent overly-depressed levels below $90/t to around $120/t, they remain about 20% below 2012 highs (around $150/t) and at levels that put a definite squeeze on margins.
Additional information on Canadian Orebodies is provided on our website:
BriefCase
NewsBytes from December 10 – December 18, 2012
Additional information on the companies featured in NewsBytes may be found at www.sedar.com, and at www.eresearch.ca.
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Canadian Orebodies Inc. ($0.14 - December 10, 2012; CO-TSX-V) …. Canadian Orebodies has reported further assay results from the summer drill program at the Company’s Haig Inlet iron ore project on the Belcher Islands in Hudson Bay, southern Nunavut. The results included 85.5 metres of 28.0% Fe (including 26.2 metres of 35.7% Fe) at the Kihl Bay target area. In 2012, CanadianOrebodies drilled a total of 6,469.6 metres in 38 holes on four separate properties, being Haig West, Haig South, the Haig North Extension, and Kihl Bay.
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Shoreline Energy Corp. ($4.18 - December 10, 2012; SEQ-TSX) …. Shoreline has declared a $0.12 per common share dividend in accordance with its quarterly dividend policy. The record date is December 31, ex-dividend December 27, and the payment date is January 17, 2013.
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Bioniche Life Sciences Inc. ($0.32 - December 13, 2012; BNC-TSX) …. The Department of Health in Hong Kong has issued a licence to Bioniche to sell its Enhance™ I.A./I.V. equine product (a formulation of purified hyaluronate sodium that can be administered to horses by intravenous or intra-articular injection). Bioniche is working with a Hong Kong distributor (Associated Medical Supplies Co., Ltd.) for distribution of Enhance™ I.A./I.V. in Hong Kong.
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Antioquia Gold Inc. ($0.08 - December 13, 2012; AGD-TSX-V) …. Antioquia has closed the second and final tranche of its non-brokered private placement for aggregate gross proceeds of $365,000. The Company issued 3,041,665 units at $0.12 per unit, with each unit comprising one common share and one-half of one common share purchase warrant exercisable at $0.25 for a period of six months from the date of issuance. Proceeds from the placement are to be used to continue the exploration program at Antioquia’s Cisneros project in Colombia.
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Monthly Top Ten
The top-ten www.eresearch.ca downloaded reports since November 30, 2012:
- Strike Minerals Inc., Perspective, November 22
- Microbix Biosystems Inc., Perspective, November 30
- SIR Restaurants, StockPotentials Perspective, November 26
- Russel Metals Inc., Phases&Cycles, November 19
- Apple Inc., Day Chart, November 20
- Bioniche Life Sciences Inc., Perspective, November 23
- Saputo Inc., Phases&Cycles, December 4
- Bioniche Life Sciences Inc., Perspective, December 5
- Pizza Pizza Royalty Income Fund, StockPotentials Perspective, Nov. 29
- Microbix Biosystems Inc., Perspective, November 22
Bi-Weekly Top Five
The top-five www.eresearch.ca downloaded reports since December 3, 2012:
1. Saputo Inc., Phases&Cycles, December 4
2. Bioniche Life Sciences Inc., Perspective, December 5
3. Microbix Biosystems Inc., Perspective, November 30
4. Canadian Orebodies Inc., Perspective, December 12
5. Vatic Ventures Inc., Perspective, December 12
Monthly Top-Five Requested Articles
The top-five www.eresearch.ca downloaded articles since November 30, 2012:
1. Gold UpLeg, Phases & Cycles, December 4
2. Commodities Super Cycle Is Over, Wealth Wire, November 20
3. Year-End Rally, Phases & Cycles, November 27
4. Two-Tier Market, Phases & Cycles, December 12
5. Market Breadth, theUpTrend.com, December 5
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